T officials present bleak options, including fare increases and service cuts, to close looming deficit
MBTA officials painted a dark picture Tuesday of the T’s future if no funding increase arrives from the state, outlining cost-saving measures that could dramatically decrease service, increase fares, and fundamentally change the size and scope of the public transit service.
Facing a projected deficit of $130 million for fiscal 2014, Charles Planck, director of strategic initiatives for the MBTA, presented the Massachusetts Department of Transportation’s finance committee with options for how the T could balance its budget, which is due by April 15.
T officials are hoping to receive additional state funding through an expansive transportation finance plan proposed by Governor Deval Patrick earlier this year, which relies on a slew of tax increases to fund investments in roads, bridges, and public transportation, which would help shore up the T’s finances over the long term. But it will probably be months,long after the T’s budget deadline, before the Legislature votes on the funding plan.
Even then, lawmakers could choose to reject or only partially approve the plan.
Beverly A. Scott, general manager of the MBTA, bristled at suggestions that the austere budget proposals presented Tuesday were scare tactics. Balancing the budget, she said, is required by law. The potential fare hikes and service cuts are simply a reality of the T’s strained financial situation, she said.
“There are consequences of inaction,” Scott said. “We’re just doing what we need to do. . . . This is where we find ourselves.”
Last year, the T received a one-time influx of additional state cash to help with its operating deficit. Those funds, with a 23 percent fare increase, allowed the T to balance its budget for fiscal 2013.
Now, the T is faced once more with a dire financial landscape.
In one scenario presented Tuesday, the T’s deficit would be closed solely with fare hikes. In that case, Planck said, fares would need to rise by a total of 33 percent, increasing subway fares from $2 to $2.60, bus fares from $1.50 to $2, and fares on The Ride from $4 to $5.25. A commuter rail pass that currently costs $329 would increase to $461.
In another scenario, T officials would implement a 15 percent fare increase to cover half the deficit, or $65 million. The other half would come from cuts to operating costs: the elimination of the 30 least popular bus routes, curbed schedules on the T and commuter rail, and the closure and sale of some MBTA facilities and fleet, which would lower maintenance costs.
Some of those cuts, Planck said, would not just limit the hours and frequency of service on the T, but would dramatically reshape the area that it covers.
“If there is no action on the governor’s transportation plan, we’re going to need to discuss a resizing of the MBTA, so that it is consistent with the resources available going forward,” Planck said.
To some state legislators, such dramatic cuts sounded far-fetched.
Representative Ryan Fattman, a Sutton Republican, said the MBTA’s stark picture of service cuts and fare hikes might be overstated as the Patrick administration pushes for support of the governor’s proposed budget.
“The public doesn’t know if they can trust in the government, and it’s because people tend to use hyperbole,” he said.
Fattman said he would rather see state programs and organizations like the MBTA eliminate “low-hanging fruit,” or costly nonessentials, before taxes are raised.
John R. Jenkins, chairman of the MassDOT board of directors, made it clear that it remains a very real possibility that the State House will decide not to send any additional funds to the T.
“We’ve got to put a placeholder plan in place, not knowing what relief we’re going to get from the Legislature,” said Jenkins. “And unfortunately, we’ve got to plan that we’re not going to get any.”
Planck estimated that it would take seven or eight months to increase fares, but Jenkins said T officials must work faster than that to maximize the amount of money that can be raised through increases, even if it means cutting the number of community hearings held to discuss such hikes.
“We want a legitimate, we-can-do-it plan, not a dream plan,” Jenkins said. “This has got to be a plan that when the Legislature says no . . . then we have to be able to adjust and put that plan in place quickly.”
Planck warned that cutting service could cause a drop in fare revenue due to declining ridership, which could counteract some savings.
Ferdinand Alvaro, a member of the MassDOT board of directors, questioned whether the estimates on anticipated drop in ridership on the T and commuter rail might be inflated.
After all, he said, officials predicted that last year’s fare increases would result in a drop in passengers, but more people ride the T now than ever.
“We need a realistic assessment of what ridership impact is going to be,” Alvaro said.Globe correspondents Jaclyn Reiss and Haven Egresitz contributed to this report. Martine Powers can be reached at firstname.lastname@example.org. Follow her on Twitter @martinepowers.